Why Are So Many Veterans Unemployed?

What most would consider a morally repugnant and hideous fact has plagued our country since the Great Recession: veterans returning from Gulf War II tours (tours in the Middle East post 9/11) remain unemployed at far higher rates than non-veterans. On principle, it’s astounding to know that the men and women risking their lives to fight for America’s interests around the world return home to a country and society that does not reward them with stable employment.

The underlying causes for the treatment of our veterans in the workforce extends beyond the economic hardship following the Great Recession. The poor access to quality healthcare for soldiers as well as the premium the US economy now places on college education have conflated to insure high levels of unemployment among our returning veterans. Until both obstacles can be mitigated, veterans will most likely not see an improvement in employment numbers.

The Magnitude of the Problem

Veterans returning from active duty in the Gulf War II era face remarkably high unemployment figures. According to the Bureau of Labor Statistics, male veterans aged 18-24 have an unemployment rate of 24.3 percent compared to 15.8 percent for non-veteran males in the same age group. For those between the ages of 25 and 34, Gulf War II male veterans have an unemployment rate of 9.2 percent compared to 7.5 percent for non-veteran males.

For women, the numbers are better but female veterans from the Gulf War II era are still worse off than their civilian counterparts: 14.3 percent unemployed female veterans aged 18-24 compared to 12.8 percent in the civilian population. For the 25-34 age group, the female veteran unemployment rate is 10.8 percent compared to just 7.2 percent in the civilian workforce.

Disabilities from Active Duty

War often leaves even the strongest men and women with severe emotional and physical disabilities. In August 2013, 30% of Gulf War II veterans reported a service-related disability. These disabilities can range from physical amputations and battle-related injuries to severe emotional instability and mental illness, the latter being far more common in Gulf War II veterans than veterans from the previous Gulf War, the Vietnam War, the Korean War, or any war for that matter.

Since October of 2001, roughly 1.5 million new veterans have returned home. Of those, the Veterans Administration (VA) has diagnosed 240,000 of them as patients suffering from PTSD, and this is taking into account the fact that only 840,000 of those veterans have received care from the VA. Realistically, the number of PTSD patients is probably over 400,000 considering the diagnosis rate of 28% among the 840 thousand veterans treated by the VA.

By comparison, 50,000 out of those 840,000 were wounded in action. Therefore, mental illness and PTSD seem to be the greater threat facing our soldiers. And unfortunately, this can be seen in their alarming suicide rates. The suicide rate among male veterans under 30 increased 44 percent between 2009 and 2011. Roughly two young male veterans commit suicide every day. Overall, the suicide rate for veterans is 30 per 100 thousand compared to 14 per 100 thousand for civilians.

Obviously, suicide rates aren’t directly linked to the underlying causes of pervasive unemployment, but they represent a broader more troubling issue of mental health issues in the veteran community. Those suffering from PTSD or other serious mental illnesses caused by war are likely to have more trouble holding down a steady job if they don’t receive proper treatment, and, unfortunately, many veterans do not receive proper treatment.

The bottom line is that without an increase in the number of veterans receiving quality treatment for PTSD, it may not be realistic to expect them to be fully functioning members of the workforce.

The Changing Economy

While veterans are no doubt impacted by the scars they suffer during war, physical and otherwise, they’re also impacted by the time they lose during war. Particularly because the time they’re losing is the period most civilians spend getting a college degree, and getting a college degree has never been more important in the US economy than it is today.

A college degree is worth about $500,000 in extra income over the course of a lifetime, even when factoring into account the astronomical cost of attending college. On top of that, the unemployment rate for those with a college degree or more is only 3.8 percent compared to 12.2 percent for those with only a high school degree. In order to be competitive in today’s economy, you need a college degree.

In all fairness, the US government recognizes the importance of a college degree for veterans. Accordingly they have provided generous benefits to Gulf Era II veterans through the GI Bill. The post 9/11 GI Bill includes 36 months of tuition equal to the cost of the given state’s most expensive public university, a housing allowance, and a book stipend.

And many veterans use the benefits provided to them by the new GI Bill. In fact, a recent study found that 52 percent of veterans who received benefits from the new GI bill graduated from college with a degree. This number is only slightly lower than the 54 percent average graduation rate for civilians.

The key question though is what percentage of Gulf War II veterans has a degree when entering the workforce? That’s a key determinant of how successful and how competitive they will be in the job market.

College Degrees Among New Veterans

According to the Bureau of Labor Statistics, 23 percent of Gulf Era II veterans have a college degree, as of 2009. Roughly 30 percent of the adult workforce has a college degree, but it’s more pertinent to examine how many young adults between 25 and 34, who would be roughly the same age as many of the Gulf Era II veterans, have college degrees.

When accounting for educational differences as well as physical and especially psychological trauma in the veteran community, charts like this one tend to make a lot more sense.

Is the Government Doing Anything to Help?

Any rational person, even those who oppose welfare benefits for impoverished civilians, would most likely agree that veterans who risk their lives for the country have earned welfare benefits and other economic assistance from the government.

So what exactly is the government doing to help? The post 9/11 GI Bill is certainly one thing. But it may not be enough. While that helps combat one of the causes of high veteran unemployment (lack of a college degree), it does nothing to address the problem of mental illness endemic in our veterans.

The role of the Veterans Administration is to care for troops and help them recover from physical and psychological trauma sustained during combat. But, unless you’ve been living under a rock, you’ve probably heard about just how inept the VA has been in caring for our soldiers.

One Possible Solution

The government is good at sending soldiers off to war, but it seems to consistently fail at taking care of them when they get back home, at least when it comes to their health care. One problem with the VA may be that the federal government operates veterans’ hospitals and pays its physicians. This is in contrast to the single-payer systems used for Medicare and Medicaid.

In a single-payer system, the government is the sole insurer but the hospitals used are typically privately owned and operated and doctors can work for private hospitals. Medicare is largely a successful system that provides quality care to America’s seniors, and that may be attributable in many ways to it being a single-payer system. It allows beneficiaries to choose from different private hospitals and doctors.

So why not give the veterans the same kind of system? The reality is that VA hospitals, which already have a shortage of doctors and pay those same doctors far less than the private sector, can’t give the same type of care as regular hospitals. If the government would allow veterans to have their selection of private physicians and agree to cover whatever medical expenses they need, it’s possible they could drastically improve their quality of care and inevitably help them become better job candidates.

This will likely cost more, but if there’s one area that everybody from both political spectrums agrees on it’s the idea that we should do whatever it takes, as a society, to care for our veterans. The government is already helping veterans become better job prospects with the new and improved GI Bill, but now they must focus their attention on giving veterans the healthcare they need to be more employable citizens.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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